I 

114TH CONGRESS 

1ST SESSION H. R. 4256 

To simplify income-based repayment under the Federal student loan program, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 15, 2015 

Mr. MURPHY of Florida introduced the following bill; which was referred to 

the Committee on Education and the Workforce, and in addition to the 

Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

A BILL 

To simplify income-based repayment under the Federal 

student loan program, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Simple Income-Based 

5 Repayment Act’’. 

6 SEC. 2. REPAYMENT PLANS FOR BORROWERS. 

7 Section 455 of the Higher Education Act of 1965 (20 

8 U.S.C. 1087e) is amended— 


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1 (1) by striking subsection (d) and inserting the 

2 following: 

3 ‘‘(d) REPAYMENT PLANS.— 

4 ‘‘(1) DESIGN AND SELECTION FOR BORROWERS

5 BEFORE JULY 1, 2017.—With respect to a borrower 

6 of a loan made under this part before July 1, 2017, 

7 and consistent with criteria established by the Sec8 retary, the Secretary shall offer such borrower a va9 riety of plans for repayment of such loan, including 

10 principal and interest on the loan. The borrower 

11 shall be entitled to accelerate, without penalty, re12 payment on the borrower’s loans under this part. 

13 The borrower may choose— 

14 ‘‘(A) a standard repayment plan, con15 sistent with subsection (a)(1) of this section 

16 and with section 428(b)(9)(A)(i); 

17 ‘‘(B) a graduated repayment plan, con18 sistent with section 428(b)(9)(A)(ii); 

19 ‘‘(C) an extended repayment plan, con20 sistent with section 428(b)(9)(A)(iv), except 

21 that the borrower shall annually repay a min22 imum amount determined by the Secretary in 

23 accordance with section 428(b)(1)(L); 

24 ‘‘(D) an income contingent repayment 

25 plan, with varying annual repayment amounts 


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1 based on the income of the borrower, paid over 

2 an extended period of time prescribed by the 

3 Secretary, not to exceed 25 years, except that 

4 the plan described in this subparagraph shall 

5 not be available to the borrower of a Federal 

6 Direct PLUS loan made on behalf of a depend7 ent student; 

8 ‘‘(E) an income-based repayment plan that 

9 enables borrowers who have a partial financial 

10 hardship to make a lower monthly payment in 

11 accordance with section 493C, except that the 

12 plan described in this subparagraph shall not be 

13 available to the borrower of a Federal Direct 

14 PLUS Loan made on behalf of a dependent 

15 student or a Federal Direct Consolidation 

16 Loan, if the proceeds of such loan were used to 

17 discharge the liability on such Federal Direct 

18 PLUS Loan or a loan under section 428B 

19 made on behalf of a dependent student; or 

20 ‘‘(F) an income-based repayment plan, 

21 consistent with part J, except that the plan de22 scribed in this subparagraph shall not be avail23 able to a borrower of a Federal Direct PLUS 

24 Loan made on behalf of a dependent student or 

25 a Federal Direct Consolidation Loan, if the proVerDate Sep 11 2014 02:58 Dec 16, 2015 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4256.IH H4256

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1 ceeds of such loan were used to discharge the 

2 liability on such Federal Direct PLUS Loan, or 

3 a loan under section 428B made on behalf of 

4 a dependent student. 

5 ‘‘(2) DESIGN AND SELECTION FOR NEW BOR6 ROWERS ON OR AFTER JULY 1, 2017.—The Secretary 

7 shall offer a borrower of a loan made under this part 

8 on or after July 1, 2017, the following plans for re9 payment of such loan, including principal and inter10 est on the loan. The borrower shall be entitled to ac11 celerate, without penalty, repayment on the bor12 rower’s loans under this part. The borrower may 

13 choose— 

14 ‘‘(A) a standard repayment plan, con15 sistent with subsection (a)(1) of this section 

16 and with section 428(b)(9)(A)(i); or 

17 ‘‘(B) an income-based repayment plan, 

18 consistent with part J, except that the plan de19 scribed in this subparagraph shall not be avail20 able to a borrower of a Federal Direct PLUS 

21 Loan made on behalf of a dependent student or 

22 a Federal Direct Consolidation Loan, if the pro23 ceeds of such loan were used to discharge the 

24 liability on such Federal Direct PLUS Loan or 


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1 a loan under section 428B made on behalf of 

2 a dependent student. 

3 ‘‘(3) BORROWER NON-SELECTION.—If a bor4 rower of a loan made under this part does not select 

5 a repayment plan described in paragraph (1) or (2), 

6 the Secretary may provide the borrower with a re7 payment plan described in subparagraph (A), (B), or 

8 (C) of paragraph (1) for borrowers before July 1, 

9 2017, or a repayment plan described in paragraph 

10 (2)(B) for new borrowers on or after July 1, 2017. 

11 ‘‘(4) CHANGES IN SELECTIONS.—The borrower 

12 of a loan made under this part may change the bor13 rower’s selection of a repayment plan under para14 graph (1) or (2), or the Secretary’s selection of a 

15 plan for the borrower under paragraph (3), as the 

16 case may be, under such terms and conditions as 

17 may be established by the Secretary. 

18 ‘‘(5) ALTERNATIVE REPAYMENT PLANS.—The 

19 Secretary may provide, on a case by case basis, an 

20 alternative repayment plan to a borrower of a loan 

21 made under this part on or after July 1, 2017, who 

22 demonstrates to the satisfaction of the Secretary 

23 that the terms and conditions of the repayment 

24 plans available under paragraph (2) are not ade25 quate to accommodate the borrower’s exceptional 


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1 circumstances. Upon request, the Secretary shall 

2 make available for such borrowers repayment plans 

3 described in subparagraphs (B) and (C) of para4 graph (1). In designing such alternative repayment 

5 plans, the Secretary shall ensure that such plans do 

6 not exceed the cost to the Federal Government, as 

7 determined on the basis of the present value of fu8 ture payments by such borrowers, of loans made 

9 using the plans available under paragraph (2). 

10 ‘‘(6) REPAYMENT AFTER DEFAULT OR LATE

11 PAYMENT.—For any borrower who has defaulted on 

12 a loan made under this part or part B, or is more 

13 than 60 days late on a scheduled payment of such 

14 loan, the Secretary— 

15 ‘‘(A) may require the borrower to pay all 

16 reasonable collection costs associated with such 

17 loan; and 

18 ‘‘(B) if such loan was made— 

19 ‘‘(i) to any borrower who, before July 

20 1, 2017, had an outstanding balance on a 

21 student loan made, insured, or guaranteed 

22 under this part or part B, may require the 

23 borrower to repay the loan pursuant to an 

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1 based repayment plan, as described in 

2 paragraph (1)(E); or 

3 ‘‘(ii) to a new borrower, may provide 

4 the borrower the option to enroll in the re5 payment plan described in paragraph 

6 (2)(B). 

7 ‘‘(7) APPLICABILITY PROVISION.— 

8 ‘‘(A) IN GENERAL.—Except as provided in 

9 paragraph (5) and subparagraph (B) of this 

10 paragraph, the repayment plans under subpara11 graphs (B), (C), (D), and (E) of paragraph (1) 

12 are not available for a borrower who received 

13 the borrower’s first disbursement of a Federal 

14 Direct Loan on or after July 1, 2017. 

15 ‘‘(B) EXCEPTION.—The repayment plans 

16 available to a borrower of a Federal Direct 

17 PLUS Loan made on behalf of a dependent 

18 student or a Federal Direct Consolidation Loan 

19 whose proceeds were used to discharge the li20 ability of a Federal Direct PLUS Loan made 

21 on behalf of a dependent student or a loan 

22 under section 428B made on behalf of a de23 pendent student on or after July 1, 2017, shall 

24 be those described under subparagraphs (A), 

25 (B), and (C) of paragraph (1).’’. 


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1 SEC. 3. INCOME-BASED REPAYMENT PLAN. 

2 Title IV of the Higher Education Act of 1965 is 

3 amended by adding at the end the following: 

4 ‘‘PART J—INCOME-BASED REPAYMENT PROGRAM 

5 ‘‘Subpart 1—Establishment of Program 

6 ‘‘SEC. 499A. DUTIES OF THE SECRETARY OF THE TREASURY. 

7 ‘‘(a) IN GENERAL.—The Secretary of the Treasury, 

8 in consultation with the Secretary of Education, shall es9 tablish a program (hereinafter referred to as the ‘income10 based repayment program’) that provides for— 

11 ‘‘(1) repaying, through voluntary wage with12 holding and quarterly estimated payments as pro13 vided in subsection (b), loans made under part D 

14 (except that such program shall not be available to 

15 a borrower of a Federal Direct PLUS Loan made on 

16 behalf of a dependent student or a Federal Direct 

17 Consolidation Loan, if the proceeds of such loan 

18 were used to discharge the liability on such Federal 

19 Direct PLUS Loan or a loan under section 428B 

20 made on behalf of a dependent student); and 

21 ‘‘(2) transmitting to the Secretary of Edu22 cation— 

23 ‘‘(A) an account of the amounts collected 

24 under subsection (b) with respect to each indi25 vidual for whom a loan made under this part is 

26 in repayment status; and 


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1 ‘‘(B) such tax return information of each 

2 such individual as is necessary to determine the 

3 individual’s income-based repayment obligation 

4 as provided in subsection (c). 

5 ‘‘(b) WAGE WITHHOLDING AND ESTIMATED PAY6 MENTS.— 

7 ‘‘(1) IN GENERAL.—The Secretary of the 

8 Treasury shall, under rules similar to the rules of 

9 chapter 24 of the Internal Revenue Code of 1986, 

10 provide for employers making payment of wages to 

11 deduct and withhold upon such wages amounts de12 termined in accordance with tables or computational 

13 procedures prescribed by the Secretary with respect 

14 to an employee who elects withholding under this 

15 subsection with respect to a loan described in sub16 section (a)(1) that is in repayment status and, if so 

17 elected, with respect to any such loans of the em18 ployee’s spouse. 

19 ‘‘(2) WITHHOLDING REQUIREMENTS.—The ta20 bles, procedures, and guidance prescribed under 

21 paragraph (1) shall provide— 

22 ‘‘(A) for the election to have amounts with23 held as provided under this subsection; 

24 ‘‘(B) procedures and forms for an em25 ployee to indicate— 


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1 ‘‘(i) whether the employee (and, in the 

2 case of a married individual, whether the 

3 employee’s spouse) has a loan described in 

4 subsection (a)(1) that is in repayment sta5 tus; 

6 ‘‘(ii) in the case of a married indi7 vidual, whether the employee anticipates 

8 filing jointly (and accompanying guidance 

9 explaining that if filing status for the tax10 able year is uncertain the employee should 

11 indicate filing jointly to avoid underwith12 holding); 

13 ‘‘(iii) whether the exemption amount 

14 to which the employee is entitled under 

15 this section should be taken into account 

16 in determining withholding (and accom17 panying guidance explaining that, in order 

18 to avoid underwithholding, the employee 

19 should only take into account the exemp20 tion in the case of the employee’s primary 

21 employer, unless total wages from more 

22 than one place of employment will not ex23 ceed the exemption amount); 

24 ‘‘(iv) in the case of a married indi25 vidual, whether the exemption amount to 


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1 which the employee’s spouse is entitled 

2 under this section should be taken into ac3 count in determining withholding from the 

4 wages of the employee (and accompanying 

5 guidance explaining that, in order to avoid 

6 underwithholding, the employee should 

7 only take into account such exemption if 

8 such spouse is not employed, or if the total 

9 wages from the employee’s job and the 

10 spouse’s employment will not exceed the 

11 exemption amount); 

12 ‘‘(v) the number of dependents of the 

13 employee with respect to whom the em14 ployee is entitled to a deduction under sec15 tion 151(c) of the Internal Revenue Code 

16 of 1986, and, if a different number, in the 

17 case of a married employee, the number of 

18 dependents of the employee’s spouse with 

19 respect to whom such spouse is entitled to 

20 such deduction; and 

21 ‘‘(vi) an election to have additional 

22 amounts withheld; and 

23 ‘‘(C) for withholding with respect to any 

24 employee in an amount equal to the sum of— 


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1 ‘‘(i) in the case of an employee who 

2 has a loan described in subsection (a)(1) in 

3 repayment status, the percentage of so 

4 much of the employee’s wages that would 

5 count towards the employee’s income-based 

6 repayment obligation provided in sub7 section (c) as exceeds any exemption 

8 amount taken into account with respect to 

9 the employee under subparagraph (A)(iii) 

10 (prorated to the payroll period), plus 

11 ‘‘(ii) in the case of an employee who 

12 indicates that the employee’s spouse has a 

13 loan described in subsection (a)(1) in re14 payment status, the percentage of so much 

15 of the employee’s wages that would count 

16 towards the employee’s spouse’s income17 based repayment obligation (as provided in 

18 subsection (c)) as exceeds any exemption 

19 amount taken into account with respect to 

20 the employee’s spouse under subparagraph 

21 (A)(iv) (prorated to the payroll period). 

22 ‘‘(3) QUARTERLY ESTIMATED TAX PAY23 MENTS.—In the case of taxpayers who make quar24 terly estimated tax return payments under section 

25 6654 of the Internal Revenue Code of 1986 and who 


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1 have a loan described in subsection (a)(1) in repay2 ment status, the Secretary shall provide similar ta3 bles and procedures for making voluntary repay4 ments of loans described in section 499A(a)(1) con5 currently with such quarterly payments. 

6 ‘‘(4) COLLECTION AND PAYMENT.—The 

7 amounts required to be deducted and withheld under 

8 paragraph (1), and amounts required to be paid 

9 under paragraph (3), shall be collected by the Sec10 retary of the Treasury and shall be paid into the 

11 general fund of the Treasury of the United States. 

12 ‘‘(c) DETERMINATION OF INCOME-BASED REPAY13 MENT OBLIGATION.— 

14 ‘‘(1) IN GENERAL.—As soon as practicable 

15 after an individual for whom a loan described in 

16 subsection (a)(1) is in repayment status during the 

17 taxable year files an income tax return for such tax18 able year, the Secretary of the Treasury shall trans19 mit to the Secretary of Education such tax informa20 tion as is necessary to determine— 

21 ‘‘(A) the amount deducted and withheld 

22 under subsection (b)(1), and the amount paid 

23 under subsection (b)(3), for the taxable year 

24 with respect to such individual, and 


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1 ‘‘(B) the income-based repayment obliga2 tion for the taxable year for such individual. 

3 ‘‘(2) INCOME-BASED REPAYMENT OBLIGA4 TION.—For purposes of this section: 

5 ‘‘(A) IN GENERAL.—The income-based re6 payment obligation with respect to an individual 

7 for any taxable year is an amount equal to 10 

8 percent of the excess of— 

9 ‘‘(i) the sum of— 

10 ‘‘(I) the wages, salaries, tips, and 

11 other employee compensation of the 

12 taxpayer, but only if such amounts 

13 are includible in gross income for the 

14 taxable year (determined without re15 gard to sections 911, 931, and 933 of 

16 the Internal Revenue Code of 1986), 

17 ‘‘(II) the amount of the tax18 payer’s net earnings from self-employ19 ment for the taxable year (within the 

20 meaning of section 1402(a) of such 

21 Code), determined with regard to the 

22 deduction allowed to the taxpayer by 

23 section 164(f) of such Code, plus 

24 ‘‘(III) any other amount included 

25 in total income of the taxpayer for the 


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1 taxable year but not described in sub2 clause (I) or (II), over 

3 ‘‘(ii) the sum of— 

4 ‘‘(I) the exemption amount with 

5 respect to such individual, plus 

6 ‘‘(II) the lesser of the amount de7 termined with respect to the taxpayer 

8 under subclauses (II) and (III) of 

9 clause (i), or $3,000. 

10 ‘‘(B) SPECIAL RULES FOR MARRIED INDI11 VIDUALS.— 

12 ‘‘(i) EACH SPOUSE WITH LOAN.—Ex13 cept as provided in clause (ii), in the case 

14 of a joint return of two individuals who 

15 each have a loan described in subsection 

16 (a)(1) in repayment status, the income17 based repayment obligation with respect to 

18 each spouse shall be an amount determined 

19 under subparagraph (A) by apportioning 

1 20 ⁄2 of the total income on such return to 

21 each spouse. 

22 ‘‘(ii) SPECIAL RULE FOR FIRST YEAR

23 OF MARRIAGE.—In the case of the first 

24 taxable year for which any two individuals 

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1 payment obligation with respect to such an 

2 individual shall be an amount equal to the 

3 lesser of— 

4 ‘‘(I) the amount determined with 

5 respect to such individual under this 

6 paragraph (determined without regard 

7 to this clause), or 

8 ‘‘(II) the amount determined 

9 with respect to such individual under 

10 this paragraph (determined by allo11 cating to each spouse the amounts de12 scribed in subclauses (I) and (II) of 

13 subparagraph (A)(i) in proportion to 

14 the amounts attributable to each 

spouse, by allocating 1 15 ⁄2 of the amount 

16 described in subparagraph (A)(i)(III) 

17 to each spouse, and without regard to 

18 clause (i)). 

19 ‘‘(C) EXCLUSION OF CERTAIN AMOUNTS

20 PAID ON BEHALF OF INDIVIDUAL.—Any 

21 amount paid on the borrower’s behalf under 

22 section 499B(5) shall not be taken into account 

23 in determining such borrower’s income-based 

24 repayment obligation. 


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1 ‘‘(3) EXEMPTION AMOUNT.—For purposes of 

2 this section: 

3 ‘‘(A) IN GENERAL.—Except as provided in 

4 subparagraph (B), the exemption amount with 

5 respect to an individual shall be an amount 

6 equal to 150 percent of the poverty line for the 

7 individual’s household size (as determined 

8 under section 673(2) of the Community Serv9 ices Block Grant Act (42 U.S.C. 9902(2))) for 

10 the calendar year in which the taxable year 

11 ends. 

12 ‘‘(B) SPECIAL RULE FOR MARRIED INDI13 VIDUALS WHO BOTH HAVE LOANS.—If for any 

14 taxable year an individual is married, files a 

15 joint return, and has a spouse with a loan de16 scribed in subsection (a)(1) in repayment sta17 tus, then the exemption amount with respect to 

18 such individual shall be an amount equal to the 

19 sum of— 

20 ‘‘(i) 150 percent of the poverty line 

21 for a household size of one (as determined 

22 under section 673(2) of the Community 

23 Services Block Grant Act (42 U.S.C. 

24 9902(2))) for the calendar year in which 

25 the taxable year ends, and 


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‘‘(ii) 1 1 ⁄2 of the excess of— 

2 ‘‘(I) 150 percent of the poverty 

3 line for the individual’s household size 

4 minus 1 (as determined under section 

5 673(2) of the Community Services 

6 Block Grant Act (42 U.S.C. 9902(2))) 

7 for the calendar year in which the tax8 able year ends, over 

9 ‘‘(II) the amount determined 

10 under clause (i). 

11 ‘‘(C) HOUSEHOLD SIZE.—For purposes of 

12 this paragraph, an individual’s household size 

13 shall be determined by reference to the indi14 vidual, the number of dependents of the tax15 payer with respect to whom the taxpayer is en16 titled to a deduction under section 151(c) of the 

17 Internal Revenue Code of 1986, and, if married 

18 and filing jointly, such individual’s spouse. 

19 ‘‘(4) INDIVIDUALS NOT FILING A RETURN.— 

20 ‘‘(A) INDIVIDUALS NOT REQUIRED TO

21 FILE.—The income-based repayment obligation 

22 with respect to an individual not required to file 

23 a return under section 6012(a)(1) of the Inter24 nal Revenue Code of 1986 shall be treated as 

25 zero. 


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1 ‘‘(B) FAILURE TO FILE.—In the case of an 

2 individual who makes an election under sub3 section (b) with respect to a loan described in 

4 subsection (a)(1) in repayment status and fails 

5 to file a return under section 6012(a)(1) of the 

6 Internal Revenue Code of 1986, the Secretary 

7 of the Treasury shall transmit to the Secretary 

8 of Education any such tax information of the 

9 individual as may be necessary to determine 

10 whether such individual is in default under the 

11 terms of such loan. 

12 ‘‘(5) SUBSEQUENT TRANSMISSION OF EM13 PLOYER INFORMATION REPORTING.—As soon as 

14 practicable after receiving from an employer infor15 mation reporting with respect to withholding under 

16 subsection (b)(1) of an individual, the Secretary of 

17 the Treasury shall transmit to the Secretary of Edu18 cation such information as may be useful in 

19 verifying the information with respect to withholding 

20 transmitted under paragraph (1). 

21 ‘‘(d) ADDITIONAL PROGRAM REQUIREMENTS.—The 

22 Secretary of the Treasury shall establish such other poli23 cies, procedures, and guidance as may be necessary to 

24 carry out the purposes of this section, including measures 

25 to prevent underwithholding, under-reporting, and evasion 


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1 of repayment or filing. Amounts shall be deducted and 

2 withheld under this section as the Secretary determines 

3 to be most appropriate to carry out the purposes of the 

4 income-based repayment program and to reflect, as accu5 rately as is practicable, an individual’s income-based re6 payment obligation. 

7 ‘‘SEC. 499B. DUTIES OF THE SECRETARY OF EDUCATION. 

8 ‘‘The Secretary shall carry out the following activities 

9 as part of the income-based repayment program estab10 lished under this part: 

11 ‘‘(1) CALCULATION OF ANNUAL REPAYMENT

12 AMOUNTS.—The Secretary shall calculate the annual 

13 repayment amounts under section 499C(b) for bor14 rowers with 1 or more loans described in section 

15 499A(a)(1) in repayment status, including the in16 come-based repayment obligations of such borrowers 

17 in accordance with section 499A(c)(2). 

18 ‘‘(2) COMMUNICATION WITH THE SECRETARY

19 OF THE TREASURY.—The Secretary shall transmit 

20 to the Secretary of the Treasury such information as 

21 is necessary for the Secretary of the Treasury to 

22 carry out section 499A. 

23 ‘‘(3) ANNUAL STATEMENTS.—Upon calculating 

24 the annual repayment amounts under paragraph (1) 

25 for a taxable year, the Secretary shall provide a 


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1 statement, on an annual basis, to each borrower 

2 with a loan described in section 499A(a)(1), which 

3 lists the following: 

4 ‘‘(A) Total payments made on the bor5 rower’s annual repayment amount for such tax6 able year. 

7 ‘‘(B) The borrower’s annual repayment 

8 amount for such taxable year. 

9 ‘‘(C) In the case of a borrower who, ac10 cording to section 499C(f), has underpaid such 

11 annual repayment amount, the amount of such 

12 underpayment and the process for paying such 

13 underpayment under section 499C(f)(2). 

14 ‘‘(D) In the case of a borrower with an 

15 overpayment on such annual repayment 

16 amount, the amount of such overpayment and 

17 the process for requesting a refund of such 

18 amount under section 499C(g), if applicable. 

19 ‘‘(E) The outstanding balances on all the 

20 loans made to the borrower described in section 

21 499A(a)(1). 

22 ‘‘(F) A description of how the borrower’s 

23 annual repayment amount was calculated under 

24 paragraph (1) or (2) of section 499C(b). 


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1 ‘‘(4) DIRECT PAYMENT.—The Secretary shall 

2 enable a borrower to make direct payments on the 

3 borrower’s annual repayment amount for the taxable 

4 year to the Secretary throughout the year, including 

5 by providing a process for the borrower to make 

6 such payments automatically, on a periodic basis, 

7 and in an amount specified by the borrower. 

8 ‘‘(5) PAYMENTS ON A TAXPAYER’S BEHALF.— 

9 The Secretary shall— 

10 ‘‘(A) provide a mechanism for other indi11 viduals or entities to make payments on the an12 nual repayment amount of a borrower for a tax13 able year; and 

14 ‘‘(B) notify the borrower that any pay15 ments made under subparagraph (A) for the 

16 taxable year that exceed the annual repayment 

17 amount for the year shall not be refunded to 

18 the borrower. 

19 ‘‘(6) CALCULATING INTEREST ACCRUED.—The 

20 Secretary shall calculate the interest accrued for the 

21 taxable year as if the borrower’s payments under 

22 wage withholding or quarterly estimated payments 

23 under section 499A(b) for the taxable year were 

24 made in 12 equal increments throughout the year. 


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1 ‘‘(7) MANAGING LOANS.—The Secretary shall 

2 provide, through the Internet, a tool that has an 

3 interface that is consistent for all borrowers with a 

4 loan described in section 499A(a)(1), which enables 

5 each such borrower to— 

6 ‘‘(A) view the outstanding balances on the 

7 borrower’s loans described in section 

8 499A(a)(1); 

9 ‘‘(B) make a direct payment on the bor10 rower’s annual repayment amount or indicate 

11 that any overpayment should be refunded or ap12 plied to such loans as a prepayment amount; 

13 ‘‘(C) view prior annual statements for such 

14 loans provided under paragraph (3); 

15 ‘‘(D) view a history of payments made on 

16 such loans (including the method and source of 

17 each payment, such as tax withholding, esti18 mated taxes, direct payment, or payments made 

19 on the borrower’s behalf); 

20 ‘‘(E) view the borrower’s annual repay21 ment amount for that year, the amount already 

22 paid on such annual repayment amount, and 

23 any amount owed by the borrower or due to be 

24 refunded to the borrower; 


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1 ‘‘(F) view the borrower’s loans described in 

2 section 499A(a)(1) that have been paid off; 

3 ‘‘(G) enable the borrower to initiate an ap4 peal process under paragraph (8); and 

5 ‘‘(H) easily determine whether benefits 

6 under the Servicemembers Civil Relief Act (50 

7 U.S.C. App. 501 et seq.), if applicable, have 

8 been applied to the borrower’s loans described 

9 in section 499A(a)(1). 

10 ‘‘(8) APPEALS PROCESS.—The Secretary shall 

11 make available a process through which a borrower 

12 can appeal the calculation of the borrower’s annual 

13 repayment amount, including a worksheet that en14 ables a borrower to calculate the borrower’s annual 

15 repayment amount. 

16 ‘‘(9) DEFAULT FOR FAILURE TO FILE A RE17 TURN.—In a case in which the Secretary receives in18 formation from the Secretary of the Treasury under 

19 section 499A(c)(4) that a borrower with a loan de20 scribed in section 499A(a)(1) in repayment status 

21 has failed to file a return under section 6012(a)(1) 

22 of the Internal Revenue Code of 1986 and such bor23 rower was required to file such a return, the Sec24 retary shall— 


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1 ‘‘(A) notify the borrower of the borrower’s 

2 failure to file such a return; and 

3 ‘‘(B) if the borrower fails to file such a re4 turn within 90 days of receipt of the notice de5 scribed in subparagraph (A), consider the bor6 rower’s loans described in section 499A(a)(1) to 

7 be in default. 

8 ‘‘(10) LOAN FORGIVENESS.—The Secretary 

9 shall cancel the balance of principal and interest due 

10 on any loan described in section 499A(a)(1) that is 

11 not in default for a borrower who has made 240 

12 payments on the loan using one or more methods de13 scribed in section 499C(c). 

14 ‘‘Subpart 2—Borrower Repayment 

15 ‘‘SEC. 499C. BORROWER REPAYMENT. 

16 ‘‘(a) REPAYMENT PERIOD.—The repayment period of 

17 a loan described in section 499A(a)(1) shall— 

18 ‘‘(1) begin on the first day of the first taxable 

19 year that begins after the borrower’s in-school 

20 deferment period, or in the case of a Federal Direct 

21 Consolidation Loan, on the first day of the first tax22 able year that begins after such Consolidation Loan 

23 is disbursed; and 

24 ‘‘(2) continue until the loan is paid in full, ex25 cept that the Secretary may grant a borrower forVerDate Sep 11 2014 02:58 Dec 16, 2015 Jkt 059200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\H4256.IH H4256

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1 bearance of the borrower’s annual repayment 

2 amount— 

3 ‘‘(A) for a period not to exceed 60 days, 

4 due to administrative or technical reasons; 

5 ‘‘(B) for a period not to exceed 3 months, 

6 due to unusual circumstances that disrupt the 

7 borrower’s ability to make timely payments on 

8 the loan; or 

9 ‘‘(C) renewable at 12-month intervals for a 

10 period not to exceed 3 years, due to docu11 mented extreme economic hardship on the part 

12 of a borrower. 

13 ‘‘(b) ANNUAL REPAYMENT AMOUNT.—The annual 

14 repayment amount under this part for a taxable year for 

15 a borrower with 1 or more loans described in section 

16 499A(a)(1) in repayment status shall be equal to the less17 er of— 

18 ‘‘(1) the income-based repayment obligation for 

19 such borrower for such year, as calculated under 

20 section 499B(1); or 

21 ‘‘(2) an amount equal to the sum of the out22 standing balances (equal to the sum of the unpaid 

23 principal, interest, penalties, and fees) that the bor24 rower owes on such loans. 


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1 ‘‘(c) METHODS OF REPAYMENT.—In repaying an an2 nual repayment amount owed by a borrower for a taxable 

3 year, a borrower may— 

4 ‘‘(1) with respect to any wages earned by the 

5 borrower that are subject to Federal income tax 

6 withholding, have amounts withheld upon such 

7 wages under section 499A(b)(2); 

8 ‘‘(2) in the case of a borrower who makes quar9 terly estimated tax return payments under section 

10 6654 of the Internal Revenue Code of 1986 for the 

11 year, pay such annual repayment amount concur12 rently with such quarterly payments under section 

13 499A(b)(3); 

14 ‘‘(3) make direct payments under section 

15 499B(4) on such amount to the Secretary through16 out the year; 

17 ‘‘(4) have other individuals or entities make 

18 payments under section 499B(5) on the borrower’s 

19 annual repayment amount for the year; or 

20 ‘‘(5) another repayment plan authorized under 

21 section 455(d). 

22 ‘‘(d) ORDER OF CREDITING.—Payments on loans de23 scribed in section 499A(a)(1) shall be applied, without re24 gard to the method of such payments, first toward pen25 alties due on the loans, next toward any fees due on the 


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1 loans, then toward any interest due on the loans, and fi2 nally toward the principal due on the loan with the highest 

3 applicable rate of interest among such loans. 

4 ‘‘(e) PREPAYMENT AUTHORIZED.—A borrower shall 

5 have the right to prepay all or part of such loan, at any 

6 time and without penalty. Any such prepayment amount 

7 will be applied to loans described in section 499A(a)(1) 

8 in the same order as described in subsection (d). 

9 ‘‘(f) UNDERPAYMENTS.— 

10 ‘‘(1) PENALTIES FOR UNDERPAYMENTS.— 

11 ‘‘(A) IN GENERAL.—Subject to subpara12 graph (C), if, as of the last day of a taxable 

13 year, a borrower has not paid at least 90 per14 cent of the borrower’s annual repayment 

15 amount for such year, the borrower shall be 

16 charged a penalty in an amount equal to 10 

17 percent of the difference between— 

18 ‘‘(i) an amount equal to 90 percent of 

19 the borrower’s annual repayment amount 

20 for such year; and 

21 ‘‘(ii) the amount paid on such annual 

22 repayment amount as of such day. 

23 ‘‘(B) INCREASE OF ANNUAL REPAYMENT

24 AMOUNT.—A borrower’s annual repayment 

25 amount calculated under subsection (b) for such 


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1 year shall be increased by the amount of such 

2 penalty, but such penalty shall not be treated as 

3 a principal or interest amount for a loan de4 scribed in section 499A(a)(1). 

5 ‘‘(C) EXCEPTION.—A borrower who has 

6 paid 100 percent of the borrower’s annual re7 payment amount for the taxable year preceding 

8 the taxable year described in subparagraph (A) 

9 shall not be subject to the penalty under this 

10 paragraph for the taxable year described in sub11 paragraph (A). 

12 ‘‘(2) RECONCILING UNDERPAYMENTS.— 

13 ‘‘(A) IN GENERAL.—If, as of the last day 

14 of a taxable year, the sum of the payments 

15 made on a borrower’s annual repayment 

16 amount for such year is less than the total 

17 amount of the borrower’s annual repayment 

18 amount for such year, the borrower— 

19 ‘‘(i) in the case of the first year that 

20 the borrower has a difference between such 

21 amounts— 

22 ‘‘(I) may request, in such manner 

23 as the Secretary shall require, that 

24 the Secretary reduce the borrower’s 


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1 annual repayment amount for such 

2 year to the sum of— 

3 ‘‘(aa) the payments made, 

4 as of such day, on the borrower’s 

5 annual repayment amount for 

6 such year; and 

7 ‘‘(bb) any penalties cal8 culated under paragraph (1) re9 sulting from such underpayment; 

10 and 

11 ‘‘(II) if the borrower qualifies for 

12 the reduction requested under sub13 clause (I), shall pay the sum cal14 culated under such subclause at such 

15 time and in such manner as required 

16 by the Secretary; 

17 ‘‘(ii) if the borrower does not qualify 

18 for a reduction under clause (i) or does not 

19 request such a reduction, shall pay to the 

20 Secretary an amount equal to the dif21 ference between such amounts within the 

22 30-day period beginning on the date of re23 ceipt by the borrower of the borrower’s an24 nual statement described in section 

25 499B(3) for such year; or 


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1 ‘‘(iii) if the borrower fails to pay the 

2 amount owed by the borrower as calculated 

3 under clause (ii) within the 30-day period, 

4 shall be charged a penalty equal to 2 per5 cent of such amount for each month (pro6 rated based on the percentage of a month 

7 such penalty is charged) that such amount 

8 is owed or until the borrower defaults on 

9 the loan for which such amount is owed, 

10 whichever occurs first. 

11 ‘‘(B) DEFAULT.—A loan for which an 

12 amount is owed under subparagraph (A) and 

13 that is not paid within 360 days after the date 

14 of receipt by the borrower of the borrower’s an15 nual statement described in subparagraph (A) 

16 shall be considered to be default. 

17 ‘‘(g) OVERPAYMENTS.—If, as of the last day of a tax18 able year, the sum of the payments made on a borrower’s 

19 annual repayment amount for such year is greater than 

20 the total amount of the borrower’s annual repayment 

21 amount for such year, the Secretary shall— 

22 ‘‘(1) refund the overpayment amount, if the 

23 borrower notifies the Secretary, within the 90-day 

24 period beginning on the date of receipt of the bor25 rower’s annual statement described in section 


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1 499B(3) for such year and in a manner prescribed 

2 by the Secretary, that the borrower desires to have 

3 the overpayment amount refunded; or 

4 ‘‘(2) if a borrower fails to notify the Secretary 

5 of the borrower’s desire for a refund of such amount 

6 within such 90-day period, apply such amount as a 

7 prepayment to the borrower’s loans described in sec8 tion 499A(a)(1) in the same manner as a prepay9 ment authorized under subsection (e). 

10 ‘‘(h) EMPLOYER FAILURE TO WITHHOLD PAY11 MENTS.—In the case of a borrower whose employer fails 

12 to withhold amounts under section 499A(b)(2) upon any 

13 wages earned by the borrower that are subject to Federal 

14 income tax withholding and with respect to which the bor15 rower made an election to have amounts withheld under 

16 section 499(b)(2), the Secretary shall— 

17 ‘‘(1) reduce the borrower’s annual repayment to 

18 an amount equal to the borrower’s annual repay19 ment amount had wages from such employer been 

20 excluded when calculating the borrower’s annual re21 payment amount; and 

22 ‘‘(2) reduce any penalties for underpayments 

23 calculated under subsection (f)(1) and refund any 


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1 overpayments on such annual repayment amount, 

2 accordingly.’’. 

Æ 


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